Coverage: Q4 2025 · Information to 10 February 2026
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TGB Quarterly Regional Banking Monitor · 10 February 2026
Saudi, Emirati and Qatari central banks matched the Federal Reserve's two 25bp cuts in the fourth quarter of 2025, Egypt cut by a combined 200bp, and Saudi and Emirati banks reported higher 2025 profits even as lower rates squeezed SNB's margin.
The desk view
The quarter's defining move was imported easing. The Federal Reserve cut by 25bp on 29 October and 10 December 2025, and SAMA, the CBUAE and Qatar Central Bank each matched both moves, while Kuwait kept its rate at 3.75% in October and cut once in December. Egypt eased on its own inflation path, cutting by 100bp in October and December to an overnight deposit rate of 20.00%. Balance sheets kept growing fast: Saudi bank credit rose 14.3% year on year in Q3 2025 against 7.9% for deposits, and UAE banking assets rose 18.1%. The 2025 results show the cost of lower rates arriving in margins, with SNB's margin down 15bp, while volume growth and, at FAB, non-interest income kept profits rising. The pressure points are Saudi funding, UAE capital ratios diluted by lending growth and Egypt's still double-digit inflation.
The regional picture
Monetary policy in most of the Gulf followed the Federal Reserve through the fourth quarter. The Federal Reserve lowered the federal funds target range by 25bp to 3.75–4.00% on 29 October 2025 and by a further 25bp to 3.50–3.75% on 10 December; the two moves followed a 25bp cut to 4.00–4.25% on 17 September. It held on 28 January 2026.
SAMA cut its repo rate to 4.50% on 29 October and to 4.25% on 10 December, a combined 50bp, with the reverse repo rate falling to 3.75%. The CBUAE lowered its Base Rate to 3.90% in October and to 3.65% from 11 December; the Base Rate is anchored to the Federal Reserve's interest rate on reserve balances. Qatar Central Bank cut its deposit rate to 4.10% from 30 October and to 3.85% from 11 December, and kept it there on 28 January 2026. The Central Bank of Kuwait, whose 29 October statement described its stance as anchored to local economic conditions, kept the discount rate at 3.75% that month and cut it by 25bp to 3.50% from 11 December.
Outside the Gulf, rate setting followed domestic inflation: Egypt cut twice by 100bp and Morocco held.
Policy-rate decisions, October and December 2025
| Central bank | Rate | October 2025 | December 2025 | Level after December decision |
|---|---|---|---|---|
| Federal Reserve | Federal funds target range | Cut 25bp to 3.75–4.00% | Cut 25bp to 3.50–3.75% | 3.50–3.75% |
| SAMA | Repo rate | Cut 25bp to 4.50% | Cut 25bp to 4.25% | 4.25% |
| CBUAE | Base Rate | Cut to 3.90% | Cut 25bp to 3.65% | 3.65% |
| Qatar Central Bank | Deposit rate | Cut 25bp to 4.10% | Cut 25bp to 3.85% | 3.85% |
| Central Bank of Kuwait | Discount rate | 3.75% | Cut 25bp to 3.50% | 3.50% |
| Central Bank of Egypt | Overnight deposit rate | Cut 100bp to 21.00% (held 20 November) | Cut 100bp to 20.00% | 20.00% |
| Bank Al-Maghrib | Key rate | – | Held at 2.25% | 2.25% |
Source: Board of Governors of the Federal Reserve System, Federal Reserve issues FOMC statement (29 October 2025), 29 October 2025; Board of Governors of the Federal Reserve System, Federal Reserve issues FOMC statement (10 December 2025), 10 December 2025; Saudi Central Bank (SAMA), SAMA's Decision on Repo and Reverse Repo Rates (29 October 2025), 29 October 2025; Saudi Central Bank (SAMA), SAMA Decision on Repo and Reverse Repo Rates (10 December 2025), 10 December 2025; Central Bank of the UAE (CBUAE), Quarterly Economic Review, December 2025, 31 December 2025; Central Bank of the UAE (CBUAE), CBUAE Lowers the Base Rate by 25 Basis Points, 10 December 2025; Qatar Central Bank (QCB), Monetary Policy Committee Resolution on Monetary Policy Instruments - October 2025, 29 October 2025; Qatar Central Bank (QCB), Monetary Policy Committee Resolution on Monetary Policy Instruments - December 2025, 10 December 2025; Central Bank of Kuwait (CBK), CBK's Assessment of Key Local Economic, Financial and Banking Developments, 29 October 2025; Central Bank of Kuwait (CBK), CBK Cuts the discount rate by 25 basis points to 3.50%, 10 December 2025; Central Bank of Egypt (CBE), MPC Press Release 2 October 2025, 2 October 2025; Central Bank of Egypt (CBE), MPC Press Release 20 November 2025, 20 November 2025; Central Bank of Egypt (CBE), MPC Press Release 25 December 2025, 25 December 2025; Bank Al-Maghrib, Press release: Bank Al-Maghrib Board meeting (16 December 2025), 16 December 2025.
Saudi Arabia: credit outruns deposits
SAMA's latest quarterly review shows Saudi bank credit up 14.3% year on year to SAR3,262.2 billion in Q3 2025. Credit to the private sector rose 13.0% to SAR3,027.5 billion and credit to the public sector 35.3% to SAR234.6 billion. Total bank deposits grew 7.9% to SAR2,935.0 billion, so credit growth exceeded deposit growth by 6.4 percentage points. At the end of the quarter bank credit exceeded total bank deposits by SAR327.2 billion.
The deposit mix shifted towards time and savings accounts, which rose about 21.7% to SAR1,152.8 billion, while demand deposits grew about 2.4% to SAR1,477.8 billion. Real estate loans rose 10.8% to SAR938.0 billion, 28.8% of total bank credit, while consumer loans grew 3.1% to SAR476.5 billion. The macro backdrop stayed supportive: non-oil activities expanded 4.3% year on year in Q3 2025 and average consumer prices rose 2.2%.
Saudi banking system, Q3 2025
| Indicator | Level | Year-on-year change |
|---|---|---|
| Bank credit, total | SAR3,262.2bn | +14.3% |
| Credit to private sector | SAR3,027.5bn | +13.0% |
| Credit to public sector | SAR234.6bn | +35.3% |
| Total bank deposits | SAR2,935.0bn | +7.9% |
| Time and savings deposits | SAR1,152.8bn | +21.7% |
| Real estate loans | SAR938.0bn | +10.8% |
Source: Saudi Central Bank (SAMA), Key Economic Developments, Third Quarter 2025, 4 February 2026.
The 2025 results of Al Rajhi Bank and SNB show how this played out in earnings. SNB's net income grew 18% to SAR25.0 billion in 2025, but its net special commission income margin fell 15bp to 2.87% because lower benchmark rates cut asset yields by more than funding costs fell. Al Rajhi Bank's net income rose 25.7% to SAR24,792 million and its net financing and investment margin edged up to 3.16% from 3.13%. Corporate and wholesale lending drove growth at both banks: SNB's wholesale financing rose 21% and Al Rajhi's corporate financing 24.1%, while Al Rajhi's retail book grew 1.4%. Asset quality was strong, with NPL ratios of 0.75% at Al Rajhi and 0.68% at SNB, and loan-to-deposit ratios were 82.8% and 82.5% respectively.
Al Rajhi Bank and SNB, FY 2025
| Indicator | Al Rajhi Bank | SNB |
|---|---|---|
| Net income | SAR24.8bn (+25.7%) | SAR25.0bn (+18%) |
| Net financing | SAR753bn (+8.6%) | SAR729bn (+11%) |
| Margin | 3.16% (FY 2024: 3.13%) | 2.87% (−15bp) |
| NPL ratio | 0.75% | 0.68% (excluding POCI) |
| Capital adequacy ratio | 21.9% | 21.2% |
| Loan-to-deposit ratio | 82.8% | 82.5% (SAMA basis) |
Source: Al Rajhi Bank, 4Q 2025 Earnings Release, 27 January 2026; The Saudi National Bank (SNB), SNB 4Q 2025 Earnings Release, 27 January 2026.
United Arab Emirates: lending growth dilutes capital ratios
The CBUAE's latest Quarterly Economic Review put UAE banking assets at AED5,200 billion at the end of Q3 2025, up 18.1% year on year, across 61 banks. Gross credit rose 14.7% to AED2,479 billion; foreign credit rose 54.5% to AED467 billion and domestic credit 8.2%. Deposits rose 15.4% to AED3,186 billion, and the loan-to-deposit ratio was 77.8%. Monthly CBUAE data showed gross credit up a further 1.5% in October, to AED2,515.2 billion, and banking assets at AED5,208.8 billion.
Asset quality improved while capital ratios slipped. The NPL ratio fell to 3.6% in Q3 2025 from 5.2% a year earlier, as the stock of non-performing loans fell 20.2%. The capital adequacy ratio eased to 17.4% from 18.6%, which the CBUAE attributed to risk-weighted assets growing faster than capital, mainly because of lending; the CET1 ratio was 14.8% against 15.5%. The eligible liquid assets ratio fell to 19.0% from 21.2%.
UAE banking system soundness indicators
| Indicator | Q3 2024 | Q3 2025 |
|---|---|---|
| Capital adequacy ratio | 18.6% | 17.4% |
| CET1 ratio | 15.5% | 14.8% |
| NPL ratio | 5.2% | 3.6% |
| Net NPL ratio | 2.3% | 1.6% |
| Loan-to-deposit ratio | 78.3% | 77.8% |
| Eligible liquid assets ratio | 21.2% | 19.0% |
Source: Central Bank of the UAE (CBUAE), Quarterly Economic Review, December 2025, 31 December 2025.
Loan growth at Emirates NBD (24%) and First Abu Dhabi Bank (17%) in 2025 was faster than the system's 14.7% in the year to Q3 2025, the latest system figure. Emirates NBD added AED129 billion of gross lending in 2025, a 24% increase, and AED119 billion of deposits, and reported a record profit before tax of AED29.8 billion, up 10%, with income growth offsetting the impact of declining global interest rates. First Abu Dhabi Bank's net profit rose 24% to AED21.11 billion; its net interest income rose only 4%, to AED20.32 billion, while non-interest income rose 36% and made up 45% of revenue. FAB's loans grew 17% to AED616 billion against 7% growth in deposits, and it ended the year with a CET1 ratio of 13.3%.
Emirates NBD and First Abu Dhabi Bank, FY 2025
| Indicator | Emirates NBD | First Abu Dhabi Bank |
|---|---|---|
| Profit | Profit before tax AED29.8bn (+10%) | Net profit AED21.11bn (+24%) |
| Income | AED49.3bn (+12%) | AED36.68bn (+16%) |
| Loan growth | +24% (AED129bn gross lending) | +17% to AED616bn |
| Deposit growth | +18% (AED119bn) | +7% to AED841bn |
| Problem-loan ratio | Impaired loans 2.4% | Gross NPL 2.2% |
Source: Emirates NBD, Emirates NBD announces FY 2025 financial results, 26 January 2026; First Abu Dhabi Bank (FAB), FAB delivers 24% year-on-year growth in FY'25 net profit to 21.11 billion (press release), 28 January 2026.
Qatar and Kuwait: two routes to lower rates
Qatar Central Bank moved in step with the Federal Reserve: its two 25bp cuts took the deposit rate to 3.85%, the lending rate to 4.35% and the repo rate to 4.10%, and it kept all three unchanged on 28 January 2026, the day the Federal Reserve held.
Kuwait moved later. On 29 October 2025, the day of the Federal Reserve's cut, the Central Bank of Kuwait said its stance was anchored to local conditions and noted that the discount rate stood at 3.75%. It reported that credit facilities to residents had grown 7.2% year on year in September 2025, against 2.7% for residents' deposits and 4.1% for broad money. On 10 December it cut the discount rate to 3.50%, effective 11 December, to stimulate activity across sectors.
Egypt: easing from a high base
The Central Bank of Egypt's Monetary Policy Committee cut its three key rates by 100bp on 2 October 2025, taking the overnight deposit rate to 21.00% and the lending rate to 22.00%. It paused on 20 November after annual headline inflation rose to 12.5% in October from 11.7% in September, while estimating real GDP growth at 5.2% in Q3 2025. On 25 December it cut again by 100bp, to 20.00% for deposits and 21.00% for lending. The Committee expected inflation to average around 14.0% in 2025, against 28.3% the year before, and to converge towards its 7% target (plus or minus 2 percentage points) in Q4 2026.
Annual urban headline inflation was 12.3% in December 2025 and core inflation 11.8%. With the deposit rate at 20.00%, the gap over urban headline inflation was 7.7 percentage points. Net international reserves reached US$51,451.6 million at the end of December 2025. The CBE's latest Financial Stability Report put the banking sector's capital adequacy ratio at 18.3% in March 2025, against a minimum of 12.5%, and reported a return on equity of 39% for FY 2024. Deposits grew 25.3% in March 2025, and foreign investors held 44.7% of the domestic treasury-bill market. That share leaves Egypt's domestic government funding sensitive to portfolio flows.
Morocco: on hold, with partial pass-through
Bank Al-Maghrib held its key rate at 2.25% on 16 December 2025 and said it would take its decisions meeting by meeting. It projected inflation at 0.8% for 2025, 1.3% in 2026 and 1.9% in 2027. The pass-through of earlier cuts remains incomplete: by Q3 2025 lending rates to the non-financial sector had fallen 58bp since easing began in June 2024, against 75bp for the key rate. The central bank projected credit growth to the non-financial sector of 4.1% in 2025 and 5% in 2026.
Cross-country comparison
MENA banking monitor: policy rates and system indicators (reference periods in brackets)
| Market | Policy rate after December 2025 decision | Change in Q4 2025 | Credit growth | Capital | Asset quality |
|---|---|---|---|---|---|
| Saudi Arabia | Repo 4.25% | −50bp | +14.3% (Q3 2025) | Not available at system level | Not available at system level |
| UAE | Base Rate 3.65% | −50bp | +14.7% (Q3 2025) | CAR 17.4% (Q3 2025) | NPL 3.6% (Q3 2025) |
| Qatar | Deposit rate 3.85% | −50bp | Not available | Not available | Not available |
| Kuwait | Discount rate 3.50% | −25bp | +7.2% to residents (September 2025) | Not available | Not available |
| Egypt | Overnight deposit 20.00% | −200bp | Not available | CAR 18.3% (March 2025) | Not available |
| Morocco | Key rate 2.25% | Unchanged | 4.1% projected (2025) | Not available | Not available |
Source: Saudi Central Bank (SAMA), SAMA Decision on Repo and Reverse Repo Rates (10 December 2025), 10 December 2025; Saudi Central Bank (SAMA), SAMA's Decision on Repo and Reverse Repo Rates (29 October 2025), 29 October 2025; Saudi Central Bank (SAMA), Key Economic Developments, Third Quarter 2025, 4 February 2026; Central Bank of the UAE (CBUAE), CBUAE Lowers the Base Rate by 25 Basis Points, 10 December 2025; Central Bank of the UAE (CBUAE), Quarterly Economic Review, December 2025, 31 December 2025; Qatar Central Bank (QCB), Monetary Policy Committee Resolution on Monetary Policy Instruments - December 2025, 10 December 2025; Qatar Central Bank (QCB), Monetary Policy Committee Resolution on Monetary Policy Instruments - October 2025, 29 October 2025; Central Bank of Kuwait (CBK), CBK Cuts the discount rate by 25 basis points to 3.50%, 10 December 2025; Central Bank of Kuwait (CBK), CBK's Assessment of Key Local Economic, Financial and Banking Developments, 29 October 2025; Central Bank of Egypt (CBE), MPC Press Release 25 December 2025, 25 December 2025; Central Bank of Egypt (CBE), MPC Press Release 2 October 2025, 2 October 2025; Central Bank of Egypt (CBE), Central Bank of Egypt Publishes the Financial Stability Report - March 2025, 4 November 2025; Bank Al-Maghrib, Press release: Bank Al-Maghrib Board meeting (16 December 2025), 16 December 2025.
SAMA, the CBUAE and Qatar Central Bank each cut by 50bp in the quarter, Kuwait by 25bp and Egypt by 200bp, while Morocco held. Among the markets with comparable credit data, growth was fastest in the UAE and Saudi Arabia.
Outlook risks
In Saudi Arabia, credit growth of 14.3% against deposit growth of 7.9%, with time and savings deposits up 21.7%, points to continued pressure on funding costs even as policy rates fall. In the UAE, foreign credit growth of 54.5% and a 1.2-point fall in the capital adequacy ratio are the indicators to watch as lending expands abroad. In Egypt, the MPC itself flagged non-food inflation and fiscal measures as constraints on disinflation, and a foreign share of 44.7% of the treasury-bill market in March 2025 ties domestic funding to external sentiment. In Morocco, incomplete pass-through means earlier cuts have yet to reach borrowers in full.
What to watch
- Q4 2026: the CBE's target of 7% inflation (plus or minus 2 percentage points), against 12.3% urban headline inflation in December 2025.
- Q1 2026: Emirates NBD expects two further branches to open in Saudi Arabia, taking its network to 24.
- 2026: Bank Al-Maghrib projects credit growth of 5% and inflation of 1.3%.
- 2026: the CBUAE forecasts UAE GDP growth of 5.2% and inflation of 1.8%.
Primary sources: Board of Governors of the Federal Reserve System, Federal Reserve issues FOMC statement (29 October 2025), 29 October 2025; Board of Governors of the Federal Reserve System, Federal Reserve issues FOMC statement (10 December 2025), 10 December 2025; Saudi Central Bank (SAMA), SAMA's Decision on Repo and Reverse Repo Rates (29 October 2025), 29 October 2025; Saudi Central Bank (SAMA), SAMA Decision on Repo and Reverse Repo Rates (10 December 2025), 10 December 2025; Central Bank of the UAE (CBUAE), CBUAE Lowers the Base Rate by 25 Basis Points, 10 December 2025; Central Bank of the UAE (CBUAE), Quarterly Economic Review, December 2025, 31 December 2025; Qatar Central Bank (QCB), Monetary Policy Committee Resolution on Monetary Policy Instruments - October 2025, 29 October 2025; Qatar Central Bank (QCB), Monetary Policy Committee Resolution on Monetary Policy Instruments - December 2025, 10 December 2025; Central Bank of Egypt (CBE), MPC Press Release 2 October 2025, 2 October 2025; Central Bank of Egypt (CBE), MPC Press Release 25 December 2025, 25 December 2025; The Saudi National Bank (SNB), SNB 4Q 2025 Earnings Release, 27 January 2026; Al Rajhi Bank, 4Q 2025 Earnings Release, 27 January 2026; Emirates NBD, Emirates NBD announces FY 2025 financial results, 26 January 2026; First Abu Dhabi Bank (FAB), FAB delivers 24% year-on-year growth in FY'25 net profit to 21.11 billion (press release), 28 January 2026; Saudi Central Bank (SAMA), Key Economic Developments, Third Quarter 2025, 4 February 2026; Central Bank of Kuwait (CBK), CBK's Assessment of Key Local Economic, Financial and Banking Developments, 29 October 2025; Central Bank of Kuwait (CBK), CBK Cuts the discount rate by 25 basis points to 3.50%, 10 December 2025; Central Bank of Egypt (CBE), CPI Press Release December 2025, 11 January 2026; Board of Governors of the Federal Reserve System, Federal Reserve issues FOMC statement (17 September 2025), 17 September 2025; Board of Governors of the Federal Reserve System, Federal Reserve issues FOMC statement (28 January 2026), 28 January 2026; Qatar Central Bank (QCB), Monetary Policy Committee Resolution on: Monetary Policy Instruments - January 2026, 28 January 2026; Bank Al-Maghrib, Press release: Bank Al-Maghrib Board meeting (16 December 2025), 16 December 2025; Central Bank of Egypt (CBE), MPC Press Release 20 November 2025, 20 November 2025; Central Bank of the UAE (CBUAE), Summary Report: Monetary & Banking Developments - October 2025, 3 December 2025; Central Bank of Egypt (CBE), Net International Reserves reached US$ 51,451.6 mn at the end of December 2025, 6 January 2026; Central Bank of Egypt (CBE), Central Bank of Egypt Publishes the Financial Stability Report - March 2025, 4 November 2025.